The Russian Senate has approved a draft law on crypto mining, marking a significant development for the industry pending the signature of President Vladimir Putin.
Key Provisions of the Mining Law
Legal Entities and Sole Proprietors:
Both industrial mining firms and individual miners can mine crypto, provided they register on a national list.
Energy Consumption Limits: Home-based miners can mine tokens if they stay within government-set energy consumption limits.
Regional Bans: The government can impose bans on mining in regions with energy deficiencies.
Effective Date: The law is expected to take effect on September 1, 2024.
Historical Context
Russian miners have long sought legal clarity and regulation for their industry, facing a political stalemate and legal uncertainty. Recent lobbying and power shortages in certain mining areas have expedited the legislative process.
Reactions from the Mining Community
Positive Responses: Some miners view the law as a breakthrough, providing a regulatory framework that could streamline operations and reduce legal risks.
Concerns and Criticism: Others express concern over the requirements to register and report all earnings and wallet addresses. There are worries about how this data will be handled and the potential for prohibitive energy price hikes.
Compliance and Restrictions
Registry and Reporting: Miners must register and report their activities to the tax authorities and provide details of their crypto wallets.
Sales Restrictions: Miners and mining pools must sell coins without using Russian infrastructure, likely forcing sales through international exchanges. This could lead to sanctions from Western governments on platforms dealing with Russian miners.
Potential National Exchange Infrastructure
Despite current restrictions, Russian media suggests a national exchange infrastructure might be developed in the future to facilitate domestic trading.
Industry Concerns
Data Handling: Uncertainty about how mining data will be processed and used by authorities.
Energy Costs: Concerns about potential energy price hikes affecting the profitability and attractiveness of mining in Russia.
Regulatory Impact: Experts argue that regulatory measures should first stabilize the industry before considering tariff increases. Pressure on large miners might reduce Russia’s appeal in the global crypto market.
The approval of the crypto mining law by the Russian Senate represents a significant regulatory milestone. While it brings some relief and structure to the industry, it also raises concerns about data privacy, energy costs, and compliance with international sanctions. The impact of these regulations will depend on their implementation and the responses from both the mining community and international actors.
Source: cryptonews.com
